Should you save for your retirement or child’s education first?

Interest earned on an RESP is also not taxed until the money is withdrawn. And if an eligible student — registered with a post-secondary institution — is the one who withdraws the money, the tax falls on them, not you. Financial advisor Andrew Rice from the Toronto firm Stewart & Kett says this is what makes an RESP attractive.

‘Let’s say a student didn’t work at all. Didn’t work part-time, didn’t work in the summer and their income was under $12,000 a year, then any growth and grants under $12,000 a year would be tax-free,” he says.